Fewer Americans than forecast filed applications for unemployment benefits last week, illustrating the Federal Reserve’s view of a stronger labor market.
Initial jobless claims climbed by 7,000 to 265,000 in the week ended March 12, a report from the Labor Department showed on Thursday. Last week also coincided with the period that the government surveys businesses and households to calculate payrolls and the jobless rate for March.
The report shows that companies are not only hiring more workers but also retaining the ones they already have to handle demand. Fed officials said in a statement Wednesday after their monetary policy meeting that there was a host of data pointing to “additional strengthening of the labor market.”
Claims “suggest that the labor market continues to be pretty solid,” David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, said before the report. “Jobs ultimately are the key to everything in the economy. If we don’t have jobs, there’s no income, and there’s no spending.”
Claims, which remain close to the four-decade low of 255,000 reached in mid-July, have been below 300,000 for 54 weeks. That’s the longest stretch since 1973 and consistent with a healthy labor market economists say.
The median forecast in a Bloomberg survey called for 268,000 claims, with economists’ estimates ranging from 255,000 to 280,000. The previous week’s figure was revised to 258,000 from an initially reported 259,000.
No states estimated data last week and there was nothing unusual in the data, according to the Labor Department.
The four-week moving average of claims, a less volatile measure than the weekly figures, rose to 268,000 from 267,250. The latest figure compares with an average of 273,250 during the comparable employment survey period for February. The economy added 242,000 workers last month, while the unemployment rate held at an eight-year low of 4.9 percent.
The number of people continuing to receive jobless benefits rose by 8,000 to 2.24 million in the week ended March 5. The unemployment rate among people eligible for benefits held at 1.6 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Fed officials said in a statement Wednesday that “a range of recent indicators, including strong job gains,” shows robust employment conditions. Central bankers held off from raising interest rates and scaled back forecasts for how high borrowing costs will rise this year.
The Federal Open Market Committee kept the target range for the benchmark federal funds rate at 0.25 percent to 0.5 percent. The median of policy makers’ updated quarterly projections saw the rate at 0.875 percent at the end of 2016, implying two quarter-point increases this year, down from four forecast in December.